Brewing Up Some Manufacturing Tea

"People are making a ton of money off of us and we're making nothing off of them."That quote from an unnamed woman from Chicago squarely defines the issue that is costing politicians from both parties their jobs and is very likely to cost the Democrats control of the House this Fall, rendering Barrack Obama virtually powerless for the duration of his term.

The Tea Party movement has the political establishment thoroughly stymied. The career politicians have long paid short shrift to the average American living in what they sneer at as the 'fly over states', seeing the people as a bunch of ignorant rubes to be manipulated every few years when election time comes. And now that the unwashed masses are taking matters into their own hands, the pols are hopelessly unable to grasp the situation.

Through their limited 'inside the beltway' lens, the Democrats figure the Tea Partiers must be a Republican organization because they toss the governors of Virginia and New Jersey out on their ear and do the seemingly impossible and take possession of Ted kennedy's old seat that has been long assumed to be the private property of the Dems.

But then they turn around and send Republican senatorial institution Bob Bennett packing in Utah, and ignored the Republican Party's support and investment in McCollum in Florida, and now it looks like Murkowski in Alaska.

Perhaps if the politicians saw Facebook as vehicles for two way communication between 'friends' rather than just another forum for preaching down to those they seek to manipulate, they would have taken notice of the 400,000 people who signed on as followers of the 'Re-elect Nobody' page within 24 hours of its creation.

The message is even clearer in a poll published a few months ago by the Alliance for American Manufacturing, a supposedly non=partisan group that is really driven by the Steelworker's Union. According to the poll, (which is the source of the quote at the beginning of this post), 66% of us agree with the statement "Manufacturing is a critical part of the American economy and we need a manufacturing base here is this country are to thrive in the future." Only 30% sign on to the alternative, that innovation, high tech and services are acceptable replacements for manufacturing jobs.

Most significant about the poll is that "We have lost too many manufacturing jobs" is the 4th greatest concern among the voters – a greater concern that health care, terrorism and illegal immigration. If thepoliticians would look at that data, and then compare it with this chart, they might begin to get a clue. While Obama administration fiddles and does nothing to help manufacturing and a great deal to hurt it, the voters are hardly ignorant of the fact that the the wholesale abandonment of manufacturing took place on the Republican watch – and long before the economy went in the tank. Republican political hacks like Bob Bennett got the boot because he sat in D.C. sipping cognac with the lobbyists from Wall Street while America's manufacturing base was tossed in a scrap heap.The Tea Partiers may share a lot of social values with Republicans but they are fed up with the Republican Party's sell-out of main street free enterprise for Wall Street's version.

And the Democrats are in even deeper trouble with the rubes from the fly over states. The same Steelworkers who are behind the Alliance for American Manufacturing sat and listened to candidate Barack Obama tell them on July 2 , 2008 that "we have to stand up to countries that are manipulating their currency or flooding our markets with subsidized goods; that it's wrong to have a "one-size fits all" trade policy that treats countries as different as China and Mexico as if they were the same; and that our job ends not when a trade deal is signed, but when it's enforced." They then saw the issue of Chinese currency manipulation taken off the table at the G-20 economic meetings in Toronto a few months ago because the Chinese announced a decision to let the currency float just days before the G-20 Summit.

As the chart shows, the Chinese made the announcement and allowed a minimal correction in time for the Summit, and now have sent their currency well on its way back to the level before the Summit. No big surprise – the Chinese lied and Obama fell for it, and has yet to do anything about it. The number one worry identified in the poll is that "We are too deep in debt to China". The Dems have to wrap their minds around the fact that the Tea Partiers are not a Republican plot, rather they are a whole lot of Americans who see Obama's campaign talk as just another politician's lie, and they see Obama and his economic team as so deep in the pockets of the Wall Street interests they poured billions of tax dollars into bailing out to care.

Whether they have joined a Tea Party, clicked that they agree with 'Re-elect Nobody' on Facebook, or they just gripe with their friends at the bowling alley, the American people in large numbers see the abandonment of manufacturing for a load of insane theories about globalization as something they will no longer tolerate. Manufacturing is very much a central issue in the upcoming elections. Politicians from both parties who think they are going to keep their jobs by telling America that Wall Street is too big and too important to fail, that China is too critical to the future of the universe to upset, and that closing thousands of American factories is is good economics will find themselves in the same unemployment lines as the manufacturing people they chose to ignore.

"People are making a ton of money off of us and we're making nothing off of them,"is a far better assessment of the economic issue facing Washington than the most profound white paper Timothy Geithner has ever written, and Washington had better come up with meaningful solutions fast.

Comments

To demand that Washington come up with meaningful solutions fast is probably just going to get us in more trouble. Their objective is to legislate and control, not to clear roadblocks for individuals in pursuit of liberty and happiness.

Bryan is correct. The idea that the government should “create” jobs is what causes the government rolls to continue to grow and tax dollars to continue to be spent unwisely (think bail outs, stimulus programs, and general pork). The government should create an environment that allows business and manufacturing to work and grow as a free market dictates. Let the private sector work without government interference and the economy can grow in a more natural way. For instance, we all know that Big Government meddling in the lending sector was a major factor in the housing bubble. Instead of handing out tax dollars to support businesses and individuals, the government needs to leglistate in such a way that each of us can take responsibiiity for ourselves.

In my little town of 120,000 people there are many vacant office and manufacturing buildings. And, there are two large new buildings currently under construction. One is an expansion on a hospital (that wants a 20% increase in my health insurance). And the other is a bank (that I helped bail out).

If I owned a large company and I was feeling the pinch of the current economy, I certainly would not be spending millions of dollars on a new building.

How do you think this makes me feel when I see these new buildings being built?

“Someone is making a ton of money off of me and I’m making nothing off of them.”

Thanks for citing the Alliance for American Manufacturing’s recent national economic poll. Just an FYI that the Alliance for American Manufacturing (AAM) is indeed a non-partisan group. And more specifically, we are 100% financed by domestic manufacturing companies. You mentioned the United Steelworkers (USW) in your article. The Steelworkers do happen to be one of the stakeholders in our joint management-labor partnership. But just as significantly, leading U.S. manufacturers (including U.S. Steel, for example) constitute our key stakeholders.

I wonder what % of those polled who say one of our major problems is the loss of US manufacturing jobs actually act consistent with that concern in how they make their purchases. Do they support US manufacturing jobs by buying US made products, or do they simply look for the cheapest import they can find?

Wall Street’s drive to shift manufacturing offshore in the past 15 years (“short-termitis” to boost short-term profits) most certainly is part of the reason we’re in the fix we’re in, but American consumers aren’t without a substantial share of the blame. Products made off-shore rather than in the US factories don’t just appear here—-they are here because millions and millions and millions of Americans buy them without regard to where they are made and whether or not US jobs are being displaced. And, many of those are the same people who say “we need to restore our US manufacturing base.”

Rest assured, I believe that US manufacturers must make innovative, quality products at the right price if we want to survive. And, I believe TPS/Deming/etc. are key to our survival. I also, believe, however, that Americans must become more attuned to the connection between their buying decisions and the impact those decisions have on their local, regional and national economies. We simply can’t continue to send our purchasing $ offshore and expect it not to have a negative impact on the quality of our lives and those of our children. There isn’t a happy ending to that trajectory.

We operate a small hardwood furniture manufacturing operation in Oregon. We employ 25 people, with an average tenure of 18 years. An extraordinary team of talented, skilled and knowledgeable woodworkers and support team. We use US hardwoods and we make high-quality solid hardwood furniture (no MDF, no particle board, etc.). We have a very flexible manufacturing operation, making hundreds and hundreds of SKUs, with choices of 5 different US hardwoods and multiple finishes—-all with short lead times. Yet, so many Americans have become so accustomed to looking primarily at price (as a result of the “cheap” imports that have overwhelmed our economy) with little regard to quality, durability, etc. that furniture dealers are themselves focused primarily on price—-they don’t care where it is made—they just want it cheap.

With our TPS/Deming/etc. efforts our goal is to continually improve our operations and our products, reduce our wastes, improve our quality, and reduce our costs (and, therefore, our prices), thereby enhancing our competitiveness. Yet, that won’t be enough. Americans MUST begin to make the connection between the products they buy and their own (and their children and grandchildren, etc.) long-term health and welfare. As a country, we can’t have it both ways.

Bryan….it is interesting that many people will pay extra–sometimes very substantially extra–for products that are “green” or (in the case of groceries) “local”—but fewer seem willing to pay extra for “American made.”

With so many products nowadays you just can’t find a US (or Canadian in my case) made alternative. Period.

Unfortunately, when you do find stuff that is locally made (and I count US-made as “local” because our economies are so tied together that what’s good for you is usually good for us) it seems that the cost is disproportionately high, almost as if you are being gouged for trying to buy local. As Bill and Kevin have often demonstrated, the cost of making stuff locally should not be that much higher than offshore, if done right.

I generally will try to find quality goods locally made. But I do have a budget…

Last Tuesday, 2 November 2010, was the day the Free and the Brave had pledged to “Re-Elect Nobody” and “throw the bums out” of Washington. Instead, with their woolly heads filled with billions of dollars worth of political propaganda, half-truths and outright lies paid for in no small part by foreign and anonymous corporate donations legalized by the Supreme Court’s “Citizens United v. FEC” decision, the American Sheeple voted as programmed and–despite the largely-manufactured dissent and highly-publicized victories of a few billionaire-funded AstroTurf Tea Party candidates–dutifully re-elected the incumbents in 83% of the Senate contests and 86% of all House races.

Re-Elect Nobody? Yeah Right… There was no real change in 2008. There was no real change in 2010. There will be no real change in 2012 or thereafter. In the following article from GlobalResearch.ca, Dr. Paul Craig Roberts explains why.

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ARTICLE by Dr. Paul Craig Roberts

THE IMPOTENCE OF ELECTIONS
Americans out of work, out of income, out of homes, out of hope…

GlobalResearch.ca, November 4, 2010 — In his historical novel, The Leopard, Giuseppe di Lampedusa writes that things have to change in order to remain the same. That is what happened in the US congressional elections on November 2.

Jobs offshoring, which began on a large scale with the collapse of the Soviet Union, has merged the Democrats and Republicans into one party with two names. The Soviet collapse changed attitudes in socialist India and communist China and opened those countries, with their large excess supplies of labor, to Western capital.

Pushed by Wall Street and Wal-Mart, American manufacturers moved production for US markets offshore to boost profits and shareholder earnings by utilizing cheap labor. The decline of the US manufacturing work force reduced the political power of unions and the ability of unions to finance the Democratic Party. The end result was to make the Democrats dependent on the same sources of financing as Republicans.

Prior to this development, the two parties, despite their similarities, represented different interests and served as a check on one another. The Democrats represented labor and focused on providing a social safety net. Social Security, Medicare, Medicaid, food stamps, unemployment insurance, housing subsidies, education, and civil rights were Democratic issues. Democrats were committed to a full employment policy and would accept some inflation to secure more employment.

The Republicans represented business. The Republicans focused on curtailing big government in all its manifestations from social welfare spending to regulation. The Republicans’ economic policy consisted of opposing federal budget deficits.

These differences resulted in political competition.

Today both parties are dependent for campaign finance on Wall Street, the military/security complex, AIPAC, the oil industry, agri-business, pharmaceuticals, and the insurance industry. Campaigns no longer consist of debates over issues. They are mud-slinging contests.

Angry voters take their anger out on incumbents, and that is what we saw in the election. Tea Party candidates defeated Republican incumbents in primaries, and Republicans defeated Democrats in the congressional elections.

Policies, however, will not change qualitatively. Quantitatively, Republicans will be more inclined to more rapidly dismantle more of the social safety net than Democrats and more inclined to finish off the remnants of civil liberties. But the powerful private oligarchs will continue to write the legislation that Congress passes and the President signs. New members of Congress will quickly discover that achieving re-election requires bending to the oligarchs’ will.

This might sound harsh and pessimistic. But look at the factual record. In his campaign for the presidency, George W. Bush criticized President Clinton’s foreign adventures and vowed to curtail America’s role as the policeman of the world. Once in office, Bush pursued the neoconservatives’ policy of US world hegemony via military means, occupation of countries, setting up puppet governments, and financial intervention in other countries’ elections.

Obama promised change. He vowed to close Guantanamo prison and to bring the troops home. Instead, he restarted the war in Afghanistan and started new wars in Pakistan and Yemen, while continuing Bush’s policy of threatening Iran and encircling Russia with military bases.

Americans out of work, out of income, out of homes and prospects, and out of hope for their children’s careers are angry. But the political system offers them no way of bringing about change. They can change the elected servants of the oligarchs, but they cannot change the policies or the oligarchs.

The American situation is dire. As a result of the high speed Internet, the loss of manufacturing jobs was followed by the loss of professional service jobs, such as software engineering, that were career ladders for American university graduates. The middle class has no prospects. Already, the American labor force and income distribution mimics that of a third world country, with income and wealth concentrated in a few hands at the top and most of the rest of the population employed in domestic services jobs. In recent years net new job creation has been concentrated in lowly paid occupations, such as waitresses and bartenders, ambulatory health care services, and retail clerks. The population and new entrants into the work force continue to grow more rapidly than job opportunities.

Turning this around would require more realization than exists among policymakers and a deeper crisis. Possibly it could be done by using taxation to encourage US corporations to manufacture domestically the goods and services that they sell in US markets. However, the global corporations and Wall Street would oppose this change.

The tax revenue loss from job losses, bank bailouts, stimulus programs, and the wars have caused a three-to-four-fold jump in the US budget deficit. The deficit is now too large to be financed by the trade surpluses of China, Japan, and OPEC. Consequently, the Federal Reserve is making massive purchases of Treasury and other debt. The continuation of these purchases threatens the dollar’s value and its role as reserve currency. If the dollar is perceived as losing that role, flight from dollars will devastate the remnants of Americans’ retirement incomes and the ability of the US government to finance itself.

Yet, the destructive policies continue. There is no re-regulation of the financial industry, because the financial industry will not allow it. The unaffordable wars continue, because they serve the profits of the military/security complex and promote military officers into higher ranks with more retirement pay. Elements within the government want to send US troops into Pakistan and into Yemen. War with Iran is still on the table. And China is being demonized as the cause of US economic difficulties.

Whistleblowers and critics are being suppressed. Military personnel who leak evidence of military crimes are arrested. Congressmen call for their execution. Wikileaks’ founder is in hiding, and neoconservatives write articles calling for his elimination by CIA assassination teams. Media outlets that report the leaks apparently have been threatened by Pentagon chief Robert Gates. According to Antiwar.com, on July 29 Gates “insisted that he would not rule out targeting Wikileaks founder Julian Assange or any of the myriad media outlets which reported on the leaks.”

The control of the oligarchs extends to the media. The Clinton administration permitted a small number of mega-corporations to concentrate the US media in a few hands. Corporate advertising executives, not journalists, control the new American media, and the value of the mega-companies depends on government broadcast licenses. The media’s interest is now united with that of the government and the oligarchs.

On top of all the other factors that have made American elections meaningless, voters cannot even get correct information from the media about the problems that they and the country face.

As the economic situation is likely to continue deteriorating, the anger will grow. But the oligarchs will direct the anger away from themselves and toward the vulnerable elements of the domestic population and “foreign enemies.”